x Abu Dhabi, UAEFriday 28 July 2017

Emirates in discussions with Oman over oil refinery plan

A UAE Minister has discussed plans for a refinery joint venture with the government of Oman.

A UAE Minister has discussed plans for a refinery joint venture with the government of Oman.

The project was a talking point when Sultan Al Mansouri, the UAE Minister of Economy, visited Muscat this week.

"We discussed the refinery project in the area of Duqm, a joint project between the two countries," Mr Al Mansouri said in a statement on the ministerial website after concluding his three-day visit.

The International Petroleum Investment Company (Ipic), owned by the Abu Dhabi Government, and state-owned Oman Oil signed an agreement in 2009 to assess the feasibility of a jointly owned, 230,000 barrel per day (bpd) refinery in the city of Duqm.

The project is one of four refineries that Ipic hopes to build in the wider region. Last April, the investment company announced it would go ahead with a US$3 billion (Dh11.02bn), 200,000 bpd project in Fujairah.

The company also has ambitions to build refining assets in Morocco and Pakistan, and fund a refinery expansion in Jordan.

Mr Al Mansouri said the UAE considered the refinery a strategic investment. Growing demand for petrol is driving the expansion of refining in the Middle East and Asia, while fuel consumption in Europe and the US is predicted to stagnate or decline.

Like Fujairah, coastal Duqm is outside the Strait of Hormuz, the waterway at the centre of world attention after Iran threatened to block oil exports from the Gulf.

Oman's government has earmarked Duqm for $15bn of investment in the refining and petrochemicals sector over the coming decade.

Demand for refined products in the country has more than doubled over the past decade. Oman's petrochemicals industry received a boost after BP last year announced that huge gas reserves, located in hard-to-access rock formations, could be exploited.

The UK company will make its final investment decision on the multibillion-dollar project in the first half of this year. If it comes to market, the so-called tight gas will power energy-intensive industries and provide feedstock for petrochemical plants.

fneuhof@thenational.ae

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